G-20 Pushes New Banking Rule That Could Confiscate Deposits and Pensions in Future Financial Crisis

Posted Jan. 7, 2015

MP3 Interview with Ellen Brown, attorney and founder of the Public Banking Institute and author of “Web of Debt”, conducted by Scott Harris

g20

In March 2013, a historically significant banking crisis occurred in Cyprus, a divided island nation in the Mediterranean Sea. Cyprus had a banking industry over five times larger than the nation’s annual GDP, which attracted billions of euros from overseas, especially from wealthy Russian oligarchs, due to its low tax rates. But because both the government and banking system had accumulated mountains of debt, the Cypriot economy was in free fall.

As part of a $13 billion bailout deal made with the International Monetary Fund, the European Central Bank and the European Union – collectively known as the “troika,” the nation’s second largest bank was closed and severe limits were placed on withdrawals from all Cypriot banks. The troika engineered a stunning solution to the crisis – they confiscated up to 40 percent of funds from depositor accounts of more than €100,000 in Cypriot banks, leading to fears of similar confiscations triggered in future banking crises in other nations.

According to Ellen Brown, an attorney and founder of the Public Banking Institute, those fears were realized in mid-November when the G20 nation leaders meeting in Brisbane, Australia endorsed a new set of rules put forward by the Financial Stability Board, an international body that monitors and proposes regulations for the global financial system. Between The Lines' Scott Harris spoke with Brown, who warns that in the event of a future banking crisis caused by derivative bets gone wrong, the rules approved by G20 leaders would prioritize the payment of “too big to fail banks’” derivative obligations to each other, meaning that deposits and pension funds could be confiscated, or "bailed in," “Cypress Style,” to save the megabanks from collapse.

Find links to Ellen Brown's recent articles at publicbankinginstitute.org.

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